Since Russia’s attack on Ukraine, the price of the wheat that Julien Bourgeois grinds for boulangeries at his family’s flour mill in central France has increased more than 30 per cent. The bill for the electricity needed to run the mill has tripled. Even the price of paper used for flour sacks has hit the stratosphere.
All of which are driving up the price of a loaf of bread.
“Inflation is brutally high,” said Bourgeois, inspecting the mill’s mammoth crushers as they ground wheat into flour. He has urged the 1,000 bakeries that his company, Moulins Bourgeois, supplies to mark up the iconic French baguette by 10 cents, from a current range of one euro to $1.27, to offset the higher costs that he has had to pass along.
“Consumers can afford to pay more for now, but prices will keep rising,” Bourgeois said. “It’s worrisome.” In France, where baguettes already cost over 8 per cent more than they did a year ago, he added, “we remember that the revolution started over the price of bread.”
As inflation continues to flare across Europe, few matters are causing more concern than the cost of a basic loaf. From France to Hungary, the most essential food staple is more expensive than ever.
Bread prices are up an average of nearly 19 per cent from a year ago in the European Union — a huge increase after a rise of just over 3 per cent the year before, according to Eurostat, Europe’s statistics agency, in a report released on Wednesday.
The price of food overall has spiked to record levels, reflecting one of the biggest inflation surges in decades and leaving households with less money. In the 19 countries that use the euro, consumer prices rose to a record 9.9 per cent in September from a year earlier, and by nearly 11 per cent across the European Union, the highest in 40 years. Food prices in the euro zone climbed by a record 14.1 per cent in the year through September, while the cost of energy surged by over 40 per cent.
High consumer prices are a continuing concern in the United States, as well. The pace of inflation, near a four-decade high, remains elevated even as the Federal Reserve has undertaken aggressive policy actions to try to cool the economy. The price of bread in the United States, for instance, increased nearly 15 per cent over the year through September.
The war in Ukraine has made matters worse, roiling food and energy markets and driving up prices for grains, oilseeds and fertilisers, Eurostat said, all of which are affecting the price of bread.
Hardest hit are the Baltic and Eastern European countries near the conflict zone that depend on grain exports from Ukraine, Europe’s biggest farmland. The price of bread has shot up 77 per cent in Hungary over the past year, according to Eurostat, and over 30 per cent in Croatia, Estonia, Latvia, Lithuania, Poland and Slovakia.
The whirlwind has come as a shock in Germany, where the cost of bread has shot up over 18 per cent in a year, as overall inflation has zoomed into the double digits, too, reaching 10.9 per cent in September.
Fine Bagles, a bakery in Berlin, recently raised prices for its New York-style bagels to €1.20 from €1.10, and not without considerable angst, said Alice Zuza, an employee.
“There was a debate at the bakery,” Zuza said. “The owners didn’t want to raise prices, but, in the end, we didn’t have a choice.”
Russia’s willingness to use energy as a weapon against countries supporting Ukraine has inflamed problems by raising gas and electricity costs for flour suppliers. Bills are also soaring for energy-dependent businesses, including thousands of industrial and craft bakeries that run ovens most of the day.
In the Netherlands, a phalanx of bakeries have gone out of business since the end of summer as energy costs have soared. Bakeries in Belgium are raising prices, but 1 in 10 has been forced to shutter, with more closures expected before the end of the year.
At Velzelio Duona, an artisanal bakery in northern Lithuania, Vaidas Baranauskas has tried to avoid a similar fate. His loaves of traditional rye, made with his grandmother’s recipe, are especially prized. This year, he pushed up prices 33 per cent to as much as €12 a loaf, to offset a jump in the cost of flour, sunflower oil and sugar. The price of dried fruits and seeds used in some breads has doubled.
To curb energy bills, Baranauskas covered his roof with solar panels. But as winter approaches and the skies darken earlier, he is having to buy electricity at prices that are 500 per cent higher than a year ago. He and his six employees now run the ovens four days a week, instead of five, to save money.
“Nothing like this has ever happened before,” Baranauskas said. “It is a hard time when a lot of companies will have to choose if it is relevant to proceed with their production.” – New York Times
The writer is the Paris-based chief European business correspondent for NYT